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Abdul Halim Iskandar: Recovery Capital from the Villages

Villages are said to be one of the keys to the recovery of the national economy, which has taken a severe hit due to the Covid-19 pandemic. The villages have natural resource capital, the spirit of gotong royong (mutual cooperation), and village-owned enterprises (BUMDes). Village funds support direct cash assistance and labor-intensive programs.

Out of Rp 72 trillion in village funds this year, the allocation for the village cash labor intensive (PKTD) program has reached Rp 37.08 trillion. This program is targeted to absorb 4.2 million workers. BUMDes have also been strengthened following the stipulation that they stand as legal entities according to Law Number 11 of 2020 on Job Creation. However, lots of work needs to be done to enable villages to truly become an important player in national economic recovery.

The following are excerpts of an interview by Kompas with Villages, Disadvantaged Regions and Transmigration Minister Abdul Halim Iskandar, Thursday and Friday (19/2/2021).

What makes villages part of the economic recovery?

The Covid-19 pandemic has attacked the community health and economic dimensions. However, it is precisely in these two dimensions that the strength of the villages is tested. There were 32,016 positive Covid-19 cases in the villages on Feb. 19, 2021. This is very small compared to the national status of more than 1.26 million cases. At least 703 people who tested positive for Covid-19 died in the villages, much lower than the 34,152 deaths at the national level. This means that villages have a relatively better health level than urban areas.

This serves as capital to run the local economy according to the new habit adaptation protocol. Throughout the pandemic, the growth of the agricultural sector has always been positive, even though with a growth rate of 0.02 percent to 2.59 percent (yoy throughout the first quarter of 2020). What is also interesting is that the farmers’ term of trade has never gone down much during the pandemic, namely around 100 points. So, it can be said that this is the source of economic recovery for the villagers, as well as being the main source of national economic recovery originating from the villages.KOMPAS/DAHLIA IRAWATI

Activity executor and activity executive team of Pandanlandung village, Wagir district, Malang regency, East Java, Saturday (5/8) checking the construction of a drainage system in the village. The drainage construction program is included in the village’s 2017 development plan. The locals feel that an independent supervision of program activities by the people can resolve problems quickly.

What is the most prominent potential in rural areas for national economic recovery?

The main thing is nature, namely agriculture in a broad sense and now exotic nature has become a village tourist attraction. Next, the cultural strength, especially gotong royong (mutual cooperation), which makes economic benefits easier to spread to all citizens. For example, villagers are willing to help other unemployed residents work in labor-intensive programs, become BUMDes workers and share their fortune through various traditional ceremonies.

What is the role of village funds and how effective is their management?

The portion of village funds is 58 percent or Rp 70 trillion of the total Village Budget (APBDes) of Rp 120 trillion for all villages. This means that village funds dominate the APBDes. The special village funds are intended for community development and empowerment, not for village administration so that they are directly beneficial to residents. At this point, village funds have a role in economic recovery, especially through PKTD programs.

What is the scenario for the government to optimize the role and function of BUMDes for alleviating people from poverty and making the villagers prosperous?

At present BUMDes is the villages’ biggest opportunity to increase village income. The government has prepared a regulation on BUMDes that recognizes the status of an official legal entity, is registered by the Villages, Disadvantaged Regions and Transmigration Ministry, and then gets approval from the Law and Human Rights Ministry. BUMDes with legal entities will be easier to establish business cooperation with other business entities and access capital from formal financial institutions.DOKUMENTASI DESA KANDAR

Agricultural land in Kandar Village, Tanimbar Islands Regency, Maluku, in mid-2020. Village funds are used to support the agricultural sector in the village.

After that, BUMDes needs to report business, financial and institutional performance every month to the Villages, Disadvantaged Regions and Transmigration Ministry. This is a knowledge base for coaching, developing supply chains between BUMDes and other business entities, as well as overcoming BUMDes problems from the start.

BUMDes Bersama originating from the transformation of the Rural Financial Management Unit of former PNPM (National Community Empowerment Program) Mandiri is obliged to distribute 15 percent of its profits to poor families in the same district. Other BUMDes independently absorb labor in their business units. In 2020, 51,134 BUMDes employed 189,010 villagers. Economic recovery will move the villages so that the number of workers is expected to increase again. Currently, there are 17,428 BUMDes that are doing digital marketing.

What are the government’s efforts to increase human resource capacity in rural areas?

In the first half of 2021, the Villages, Disadvantaged Regions and Transmigration Ministry will intensify training for 35,350 village assistants. Its method is a mixture of offline and online activities through the Village Academy 4.0 with materials in the form of village data collection, village development planning, implementation of development and community empowerment, and village innovation.

The Villages, Disadvantaged Regions and Transmigration Ministry also initiated affirmations for village heads, village officials, BUMDes administrators, and village assistants to equalize experience, knowledge, work results, and achievements so far into the conversion of SKS (semester credit units) in selected study programs in a number of universities. Designed to start in August 2021, they only need to take the lack of lectures, not necessarily on campus, but carry out field assignments while working.

This article was translated by Hyginus Hardoyo.


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